Greenwich Leisure Limited (GLL) is to have a 125-year lease to take on the running of the two Preston city council run centres, and it comes with a £1million cheque from Preston City Council.

Fulwood and West View Leisure Centres are to see decades of council ownership and operation cease with councillors saying they were left ‘with no choice’ but to hand the entire leisure service over to the social enterprise.

Councillors say the decision means there is a ‘bright future’ for the centres with GLL promising £2million of immediate investment into upgrading the two centres – spent equally across the two sites.

On Wednesday night (11 January) 288 staff, one of the council’s largest departments, were informed that from April they would no longer work for the city council. The 87 permanent staff or shifts for the 193 casual staff are transferred to GLL’s workforce of thousands across the UK.

The city council’s cabinet took the decision on Wednesday evening, with leader of the city council councillor Peter Rankin saying it was ‘one of the most important decisions in recent times’. The council is now proceeding to sign a contract with GLL after the cabinet decision.

A sale or transfer of the leisure centres has been on the cards since October when Blog Preston revealed the council had begun to explore cutting loose a service it says it ‘has no statutory duty to provide’ and is subsidised to the tune of £1million-a-year.

The deal involves the city council paying GLL a reverse premium of £1m for the leisure centres to be taken off their hands.

West View Leisure centre costs £2.4m-a-year for the city council to operate and Fulwood costs £1.9m.

What do the politicians say

Cabinet member for leisure and culture councillor Peter Kelly said the alternatives were not an option.

Councillor Peter Kelly outside West View Leisure Centre

He said: “We would have needed to close one, or both, of the centres to save money. This didn’t seem like an option for the people of Preston and the hundreds of thousands of people who use these centres.

“I think this is a good deal for the city and I’ve been to see what GLL do elsewhere and I have been impressed.

“What they are proposing will see a much better leisure facility for those who go for a swim or use the gym. We know Fulwood and West View need some more and it’s not something we as a council can invest in because we don’t have those funds, but GLL do.”

The city council has handed GLL its existing maintenance plan of what needs doing at the ageing centres – Fulwood turned 40 last year – and councillor Kelly said he was confident it would be ‘business as usual’.

He said: “We’ve had assurances from GLL that for those people going to the leisure centre you initially won’t see anything different.

“All memberships are respected, the staff are there, everything is to carry on from when the deal kicks in. They have something called an ‘activation team’ and it means they’re able to get things in place very quickly and keep those centres operational.

“In terms of the plans they have for the centres and the facilities they want to put in then it’s going to give people a great leisure facility. There’s even mention of some kind of spa being developed.

“People need to remember that if you go to your budget gyms then you don’t get a pool, you don’t get all these fitness classes, and that’s why it’s a different kind of leisure package we’re able to give.”

Cllr Kelly confirmed the Passport to Leisure scheme operated by the city council to give those who are disabled or on low incomes discount access to leisure centres would be continued for the first year of GLL’s operation – and the company had similar schemes in place.

He said: “We are very sad to be losing this service from the council, because it is a very good one and we have some very talented staff. No councillor wants to lose things from being done in-house but because of the government funding cuts we’re having to make these kind of tough choices.”

City council leader Peter Rankin said the transfer of the Guild Hall to local millionaire Simon Rigby in 2014 had given them more confidence about the GLL deal.

He said: “Without doubt this is one of the most important decisions taken by the city council in recent times. It means a bright new future for the whole of Preston’s leisure service with new investment and fresh approach.

“The funding the Council now receives from Central Government is over £8m p.a. less than it received in 2012. One of the impacts of the funding reduction is that the Council is simply no longer able to afford to keep the leisure centres running. In 2015/16 the leisure service cost the council approximately £1m. Therefore we’ve had to look at alternative options – and I am delighted at this deal with GLL.

“The recent experience with handing over ownership of Preston Guild Hall fills us with confidence in proceeding with this deal. It is an opportunity for investment to be made in Preston’s leisure service.”

The leisure centre deal, according to the councils legal experts, is a land deal so GLL takes on the land and buildings on a lease basis. A nominal sum of £1 will have been paid, similar to the Guild Hall and Bus Station transfers, for the deal to happen.

Cllr Kelly said the council retained a ‘buyback’ clause so if GLL were to run into financial difficulties the council would bring the services back in house.

Fulwood Leisure Centre will no longer be under council ownership

What is a reverse premium?

A council spokesman said: “A reverse premium is the capital payment made by a landlord to a tenant for the tenant to accept the liabilities contained in a Lease and the amount of any such payment is assessed by reference to the value of the lease to both the landlord and the tenant.

“The lease to be granted to GLL contains more onerous obligations that you would usually expect in a lease with such an extensive term, such as the keep open obligation and a long term restrictive usage clause. These more onerous terms are reflected in the valuation of the leisure centres which results in the necessity for the Council to make the reverse premium payment to GLL in order for GLL to accept the Lease with those terms.”

“This is common procedure within property deals, and is within the context of an extremely positive deal for Preston in securing the leisure offer for the city, which includes £2 million investment, saving the council money, preserving jobs as well as a commitment to improving the centres.”

Who are GLL and what do they have planned?

One of GLL’s gyms in Workington, operated by Better Leisure Facilities

Operating more than 300 leisure centres, libraries and community services across the UK the social enterprise – owned by its workers – has been successful at securing contracts from cash-strapped councils.

It was established in 1993 and uses the Better leisure brand which has 650,000 members.

Managing director of GLL Mark Sesnan said: “Preston is key to the expansion of GLL’s health and wellbeing offer in the north of England.

“Our social enterprise goes from strength to strength with more people getting more active more often. We look forward to welcoming leisure staff into the GLL family and greeting many new and existing customers at Preston’s leisure centres, which will be operated under our successful Better brand.

“We are thrilled at the prospect and opportunity in the city. Preston has a fantastic reputation in the leisure industry and we aim to build on this and really take the leisure service forward from day one.”

What do you think about the deal? Do you use the leisure centres? Let us know in the comments below